Cetrus Blog

History Re-Invented - Why did SaaS Start?

Posted by Erik Hoogerhuis on May 29, 2015 5:10:00 PM

Last week we looked at why Hybrid Licensing models will become more common, and why we believe the driver is Software as a Service (SaaS). Like many fundamental shifts in technology or business models, the shift to SaaS is not because of a single invention or idea. In fact, SaaS goes back to the earliest mainframe computers, where the applications ran on a central server, and information was input remotely on teletype terminals. History re-invents itself again.

In the next series of posts, we’ll cover a number of topics about the combination of factors that enabled SaaS from several perspectives below. We certainly don’t intend to claim we’ll hit all the components.


 The application developer:

  • The Web browser (thanks, Marc Andreesen!)
  • The economics of application development
  • The economics of  distribution
  • The economics of sales and marketing
  • Internet scaling
  • The relational database
  • “per X” tracking and monetization

The buyer/licensor:

  • Increasing speed of business change
  • “Little IT” vs “Big IT”
  • De-risking application decisions
  • Operating vs Capital budgets
  • Discrete solutions to business processes

Corporate IT:

  • The cost of application upgrades
  • The cost of skilled employees
  • The economics of externally hosted applications
  • The speed of change 

As you can see, there are a lot of interrelated issues associated with SaaS.  Come back next week and we’ll start the review.

If you have strong opinions on topics we might have missed, please let us know and we’ll add them to the list.


Topics: Insider